Financial planning
soon after, and suddenly there is a gap that feels impossible to close. And when HMRC notices arrive, this is when directors feel increasingly anxious and fearful for their business’ future. It is an incredibly tough position to be in,
especially when directors are already carrying the emotional weight of responsibility for residents, staff, and families. But it is important to remember no one is alone in this, and there are practical steps business owners can take to regain control. Even when the business is running smoothly on the surface, company-level financial pressures can create hidden stress for directors, particularly those without a strong advisory network. Having access to clear guidance and support equips directors to make the best decisions for both their business and their people. Proactively spotting the warning signs, such as reliance on reserves or repeated late payments, can give directors the time to act before issues escalate. Here are six key things every care home
owner should know when HMRC gets in touch.
1. Stay compliant Maintaining up-to-date VAT returns, PAYE submissions, and company accounts is essential when HMRC becomes involved. That is because current filings give HMRC a clear line of sight into a business and form the foundation for any potential repayment plan. Without them, HMRC has limited visibility and is less able to assess what is fair or realistic. As previously mentioned, in many care homes, late filings are rarely the result of
Financial resilience
comes from
knowledge and practical action
negligence. Delayed local authority or government payments often make it difficult to submit returns on time, especially when payroll obligations are pressing. However, missing or late submissions reduce HMRC’s willingness to negotiate, as liabilities may appear larger than they actually are. Keeping filings current demonstrates
honesty and intent, and it provides HMRC with confidence in the operator’s approach, helping to preserve options and build trust even when payments cannot be made immediately. It also allows directors to proactively plan, monitor trends, and anticipate upcoming financial challenges more accurately. In short, it gives directors a clearer picture
of their own cashflow and helps identify where short-term support may be needed, before HMRC intervention becomes urgent.
2. Take advice before agreeing to anything It is important for care business owners to understand that HMRC is not a commercial creditor and works within strict internal rules, often only offering short-term arrangements of 12 to 24 months. However, for many care homes, that timeframe
is insufficient to manage ongoing costs alongside arrears, which often sees directors panic and agree to a repayment plan the company cannot afford. It is important to know, however, that
if the arrangement fails, options may then become limited. This is why it is crucial to evaluate and present the best offer the business can genuinely sustain when negotiations with HMRC begin. Specialist advisers can support with this as
they understand HMRC processes and can help present the facts in a credible way. They can also access higher-level contacts within HMRC that individual directors may not reach on their own. Ultimately, with guidance, repayment
plans can be structured according to what the business can realistically sustain, increasing the likelihood of a stable resolution and avoiding arrangements that may otherwise push the business into deeper difficulty. Seeking support early is not about
admitting failure; it allows directors to be informed and act decisively under pressure, as a result.
3. Keep communication open The bottom line is that early and consistent engagement with HMRC is essential. Silence or delayed responses can lead HMRC to escalate from discussion to enforcement quickly. Even if immediate payment is not
possible, having HMRC contact handled by a trusted adviser can buy much-needed time. While negotiating directly is possible, it can consume significant time that might otherwise be spent managing the business. Directors need to focus on what they are best at – leading the team and ensuring residents receive high-quality care – and lean on support services to reduce stress and keep the business running effectively. With HMRC, open communication
signals goodwill and professionalism, and it can make all the difference in securing understanding and workable repayment arrangements. The sooner directors speak to HMRC,
the better, as they retain more control over repayment schedules and avoid escalation. Transparency and proactive communication will also help directors plan strategically for their business, rather than simply reacting to demands.
4. Understand HMRC’s remit It is important to be aware that HMRC are tax collectors, not business advisers.
March 2026
www.thecarehomeenvironment.com 29
Paul Maguire -
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